Blog Visitors' CommentsCondo Search's comment..
I just drop by to say "thank you" for your excellent blog, and safe me from committing at a high price and wrong time buying. It helps me a small property hunter(with hard earning money) and others(i believed)a better inform. Thank you again...

Young Buyer's comment...
I've just graduated and started working, and I hope to own a residential property in Singapore after 2010/2011. So I'm starting to do my Singapore property research now. I have never come across such a comprehensive coverage on the Singapore property market, and I thank you for enlightening readers like me who want to know more :) Keep up the good work!

Young Expat's comment...
i am an overseas expat who moved to singapore a year ago and started looking out recently for property to buy as rentals started to rise all around me..i was advised to follow ur forum and since then have been impressed with all the wonderful tips exchanged in this portal..thanks to all the contributors.(Smart Buyer, the blogger here, would like to say many thanks to all these unsung heroes too)

Red's comment...
I think your reply give a rational explanation on my question. You are indeed a smart buyer and very knowledgeable.

Kate's comment...
This is a great blog filled with latest news, historical insights and good opinions that gives direction. Not the sitting on the fence type of 'pc' opinions. I love this blog. Please keep up the good work! You are really doing Singaporeans a big favour! Thank you!! I will keep on reading.

Phantasia's comment ...
Hi smart buyer,
Just wanna say thanks for your response to my query earlier in another post. And also for the very informative blog! Have learnt much from your postings! Thanks for sharing.

Smart Buyers, 10 reasons to waitFear that property price will go up forever? Here are 10 reasons to consider before you make that big commitment.......Posted by Smart Buyer(This post contains the 10 reasons that Smart Buyer first wrote for himself in mid 2007 when the property market was in a runaway euphoria, which he subsequently posted on this blog for all property buyers to consider. The arguments are supported by official data and illustrated with property supply and property price index graphs.)

Bad investments are made in Good Times
Looking at the subprime problem, it is definitely a bad news that will take time to filter down. The falling US$ is another problem that will hit the US economy. China and HK property and share mkt are 2 big bubbles.. Beware !!...Posted by km(This post contains km's first-person account of the 1998's property market crash and all the troubles that came with it - soaring mortgage rate, vacant properties with no available tenants, banks pressing for top-ups as property valuation dropped, ... his story has a happy ending of course. He'd share with you openly the lessons learnt.)

Solvency Worries STALK CREDIT-DERIVATIVES MARKET. They are now talking of SOLVENCY, not just LIQUIDITY issue .......it's really quite serious now....Posted by AnonymousHaving a house which has a big loan is a liability at this global trouble time.So far the market is still moving down slow due to the reason that many of the countries are injecting funds to buy part of the share of the banking market. The negative news continues to rise. The money is better leave in CPF and local banks to grow interests....Posted by Anonymous

During the 1995 -1998 period, the same scenerio arise..Many people cant get the HDB flat. There was the ballot system and it is just like "ti-kam", 1 out of 8 can get to buy. Due to this flocked system, many people, including those who are not so keen buyer also join the Q, paying $10 as a ballot fee, when they get balloted, then ......Posted by Anonymous

This market is definitely driven by greed and liquidity.I have never seen anything like it in my lifetime. Property prices goes up as fast a the stock market. This market is definitely driven by greed and liquidity in the asian market. What goes up must come down!...Posted by rob-502

Your Property Investment Decides Your Financial SuccessYour Property Investment may be the sole determinant of your financial success in life. One wrong move,......Posted by Smart Buyer (This post contains Smart Buyer's first-person account of the 1990's boom and bust, and how investment opportunities presented themselves in the market crash of 1998 and 2006.)

Saturday, January 17, 2009

Hello Smart Buyer!I would like to ask your expert opinion if value of property will likely appreciate more at Tiong Bahru (eg: Meraprime) where amenities are aplenty or tail-end of river valley (eg: Valley Park) when the market/economy recovers. Thanks.

Smart Buyer replied:No doubt Meraprime has a good location but the current price a mind-blowing $12xx psf and it's a 99LH property. It reminds me of how hot nearby Central Green was in the mid 90s. Now it's going at about $8xx psf. So you can see a significant discount for older condos in the same locations. You may also like to take note that between 2002-2004, Central Green dropped as low as $4xxpsf. That will give some indication of the risk of entering at a high price.

Valley Park doesn't have the MRT-location of Meraprime but it's FH. Going price is still high at $1xxx psf. Prices fell to about $6xx psf in 2003.

In summary, 99LH property price falls faster in a downturn and with age but commands better rental rate. (If you like more info on comparing 99LH with FH, ps do a blog search here.)

Quite obvously, this is still not the time to enter the market. I don't know if prices will fall to an attractive level for these properties to make good investment value. I'm in no hurry. In fact, I'd simply turn to other types of investment if property remains over-valued. I don't know if you're in the same situation, so I can't tell what you should do.

Who's to know how long it will take the property market to recover? Whether they will appreciate or not, or more importantly by how much, would depend on your purchase price. At the current price level, I can see very little upside and plenty of risk.

12
comments:

Anonymous
said...

Hello Found your blog recently and its excellent. With regard to the above post - yes, it is way too soon to enter the market now. the resale property price index is no where near the 2004 - 2006 levels yet.

If we believe this recession is going to be as bad as the SARs or Financial crisis or even worse, then logically one should till the resale property index to be closer to the 2004 - 2006 levels. On that basis, now is not the right time - try 4Q 09 or 1Q10.

if we all agree that property prices will fall and we should wait - then the best strategy is to STOP looking at property or else you will be tempted and your common sense reasoning will not prevail. So in my opinion, dont look at the property yet, or you will feel tempted against your better judgement.

From the comments above, It look up like the property price may still some more to fall. My first thought is that those who lost jobs and in financial difficulties may be the first to sell. In this environment that seems like property prices falling every day and newly launch private properties come up this year and next year, do you think is it difficult for those who are selling "older" or "second hand" property?

Hi M,It's true that some buyers can be tempted to make a premature purchase but on the other hand, it's important for buyers to keep themselves informed of the property market in an early stage so as to make an informed decision. If we can share our views of the pros and cons of various projects, it's be beneficial for all buyers.

I agree with Smart Buyer. Buying a property needs a lot of homework. Many factors, besides price, should to be researched and considered too.

Right now, more talks are on prices simply because we are faced with a hyper-speculated 2007 against a combined effect of new wave of supply increase in 2009/10 plus an unexpected worst economic crisis. So the magnitude of price swing is going to be big. But the facts are clear now, prices will fall. Anyone here who disagree should also challenge our ministers why they are revising our GDP growth forecast to between -2% to -5%.

Nevertheless, we should not neglect other important factors, especially, if you are choosing your new home. Happy shopping to all. Gong Xi Fa Cai!

Hello allYeah smart buyer, i suppose when i said dont look, i really meant, dont go view properties. I do agree we should do couch potato property search to monitor the market. I was actually speaking of myself ...i know that if i look and i like -i would be so tempted to make a premature purchase. So i guess the lesson here is to know yourself.cheers, M

The readers here have made useful and informative contribution. Honestly, i think property prices here is very high after the big run up in 2005/2007 compare to other countries where the shakeout has gather healthy momentum but not in Singapore. Banks after banks and corporates after corporates are losing by the millions and billions. For the 1st time, our Government touches our precious reserves and Singapore is the first country in Asia to enter into a full blown serious recession of 2 to 5% negative growth. Something is terribly wrong. There is still little distressed sales and the full impact of the economic crisis have not really felt broadly in Singapore yet. You dont need a genius or economists to conclude that any entry now is premature. If ever prices fall to below 2003 or earlier level, you may consider but take your time. I would prefer to buy a second hand or older property as long as it is property maintained and well located.New condominium units are crowded and the developers had exploited buyers with bay windows and planter boxes.They are more expensive even at this time because sellers and speculators still enjoy large capital gains after the last sharp run. We are entering a dangerous time and even a large dose of fiscal stimulus by the government would not help. It is medicine that come too late to save a dead patient. The damage is extremely serious and beyond immediate repair and it will take a long time to recover and for the stimulus to work. My honest view is STAY AWAY, we are entering into hardship and you dont know what will happen suddenly to your job or Singapore.

Instead of looking at the price if it is near 2004-2006 level, can we look at the unemployment figures and the help that the government is giving? So as to give a leading indicator if the market got any chance of recovering. The increase of unemployment rate and increase in budget by government to help singaporean = less chance market is going to get better near term.

Dear Anonymous,I agree with you: We should look at the unemployment figures and the help the govt is giving to stimulate economy.

I also agree with you that the property market is unlikely to recover in the near term. In my opinion, the rising unemployment is likely to put more and more downward pressure on property price esp those priced above half a million.

I don't see the govt stimulus package turning the market around. Despite the govt's effort to keep jobs, retrenchment will still rise and pay will still fall. When people get retrenched or suffer a pay-cut, affordability simply falls. This puts a brake on demand on one hand and increase supply on the other as more and more highly geared property owners are forced to liquidate their properties.

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Dear visitors:Your comments are most welcome!

The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.